JPMorgan projects Quebecor’s mobile business will capture about one-third of industry subscriber growth through the end of the decade. (Andrew Francis Wallace/Toronto Star via Getty Images) · Andrew Francis Wallace via Getty Images
JPMorgan has initiated coverage on Quebecor (QBR-B.TO) with an “Overweight” rating and a $56 price target, saying the telecom is “positioned to drive outsized share gains” in the years ahead.
Analyst Sebastiano Petti values Quebecor roughly in line with Telus (T.TO, TU) and at a premium to BCE (BCE.TO) and Rogers Communications (RCI-B.TO), arguing that the higher multiple reflects the company’s long runway for growth.
“We believe this premium is justified given Quebecor’s long-term market share opportunity in the Canadian mobile phone ecosystem and industry-leading EBITDA growth driven by wireless service revenue, cost improvements and operating leverage,” Petti wrote.
Quebecor finished at $49 on the Toronto Stock Exchange on Monday, up 3.33 per cent from its Friday close. This year, the stock is up over 50 per cent, compared to just over 21 per cent for Rogers, around eight per cent for Telus, and flat price growth at BCE.
JPMorgan projects Quebecor’s mobile business will capture about one-third of industry subscriber growth through the end of the decade, lifting its market share from roughly 11 per cent today to 14 per cent by 2030 — driven by its Freedom Mobile and Fizz brands. Petti expects that expansion to support about seven per cent annual wireless revenue growth, with earnings improving as margins widen. JPMorgan projects Quebecor’s dividend will climb from $1.40 per share in 2025 to $2.17 by 2030, alongside higher share buybacks.
Meanwhile, Scotiabank analyst Maher Yaghi offers a slightly more cautious tone, in a note summarizing sector earnings. He raised his target on Quebecor to $48 from $43.50 but kept a “Sector Perform” rating, noting that the roughly $16 gap between Freedom Mobile and the flanker brands of the other major carriers is “unsustainable” over time.
Yaghi warns that “[e]ither Freedom will lift its prices soon or the market could return to price instability not before too long.” But he also acknowledges that Quebecor captured the largest share of new wireless subscribers in the third quarter, showing that Freedom’s offers continue to resonate.
JPMorgan’s initiation comes days after Quebecor’s third-quarter results showed signs that its wireless strategy remains effective. Executives say Freedom Mobile is now attracting “customers that want a bit more, that want better performance,” rather than just bargain hunters, while churn — a measure of customers leaving for other providers — has fallen from “the highest in the industry” to “fairly equal to the lowest.”
Chief executive Pierre Karl Péladeau says average revenue per user (ARPU) is “turning the corner, and I would expect that corner to be very, very soon.” Management also described the company’s investment plans as “gradual, sensible increases, not a capex wall,” and hinted that a buyback ramp-up is “not an unfair assumption.” Management also pledged to be disciplined heading into the highly promotional Black Friday period, a time when executives say “we can easily go crazy and lose our shirt.”
Quebecor’s expansion beyond its home province accelerated after its 2023 purchase of Freedom Mobile, the divestiture required for Rogers to complete its takeover of Shaw Communications. The deal gave Quebecor access to markets in Ontario, Alberta and British Columbia, and turned it into Canada’s fourth national wireless carrier.
Since then, Quebecor has relied on aggressive discounting to build share. That disruptor role, however, has drawn scrutiny from analysts who question how long the strategy can last as competition has eroded all companies’ ARPU.
JPMorgan cautions that slower population growth and continued pricing pressure could temper wireless gains, while broadband and media remain competitive drags. JPMorgan also flags a specific risk — if the brands aren’t distinct enough, too many customers might choose the cheaper, all-digital Fizz brand instead of the main Freedom line, which “could dilute ARPU.” Even so, the bank argues Quebecor’s network investments and improving cash generation leave it well positioned.
John MacFarlane is a senior reporter at Yahoo Finance Canada. Follow him on X @jmacf.
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